NovaTech Faces $1.37B New York Claim Over Alleged Crypto Fraud

Published: 2026-10-23 17:10:10 |

New York Attorney General Letitia James is asking a court to order NovaTech founders Cynthia and Eddy Petion, the collapsed crypto platform and related entities to pay about $1.37 billion, including investor funds, alleged ill-gotten gains and interest. The request follows an August 2025 default judgment after the founders reportedly left the US and did not respond to the lawsuit; they were also barred from the securities, commodities and crypto industries. The requested payment still has to be collected. New York alleges NovaTech promised weekly returns of 2% to 4% and used new investors’ deposits to pay earlier investors and recruitment bonuses. More than 11,000 New Yorkers invested, many from Haitian communities reached through prayer groups, social media and WhatsApp. State figures say investors deposited about $1.16 billion in cryptocurrency from August 2019 to May 2023, while less than $26 million went to trading provider B2Broker; at least $134.5 million allegedly went to wallets linked to the Petions. The state is also seeking about $6.15 million related to AWS Mining, an earlier scheme that collapsed in 2019. Four NovaTech promoters separately agreed to settlements totaling nearly $6 million for victims and were barred from the relevant industries. NovaTech collapsed in 2023. The case adds to scrutiny of crypto investment fraud, but does not introduce a new trading rule for the wider market or establish a direct price catalyst for major cryptocurrencies.

Neutral

The case is significant for NovaTech investors and highlights legal and reputational risks in crypto investment schemes, but neither summary identifies a specific cryptocurrency whose price is directly affected. The $1.37 billion request concerns alleged losses and proceeds from NovaTech, while the AWS Mining claim and promoter settlements are also case-specific. In the short term, the news may increase caution toward platforms associated with high-yield promises and prompt volatility in any directly linked assets, if such assets are traded. However, no NovaTech token or broader market trading restriction is identified. Over the longer term, enforcement and investor-protection actions may affect confidence in similar schemes, but the summaries provide no evidence of a direct change to the fundamentals or price outlook of major cryptocurrencies. The expected impact on the price of a mentioned cryptocurrency is therefore neutral.